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The Trump administration intends to press India to give online retailers such as Amazon and Walmart full access to its $125bn ecommerce market, as part of a trade deal being negotiated under the threat of increased tariffs.
According to industry executives, lobbyists and US government officials, the US plans to push Prime Minister Narendra Modi’s government for a level playing field on ecommerce in wide-ranging talks on a US-India trade agreement set to also cover sectors from food to cars.
US vice-president JD Vance met Modi in New Delhi on Monday, where both “welcomed the significant progress in the negotiations for a mutually beneficial” trade agreement, according to an Indian government statement. They also noted the “continued efforts towards enhancing co-operation in energy, defence, strategic technologies and other areas”.
India faces a 26 per cent tariff on its exports to the US barring an agreement, with President Donald Trump having paused the measure for 90 days so negotiations could take place.
Amazon chief executive Jeff Bezos attended and contributed to Trump’s inauguration in January, and Walmart chief Doug McMillon was one of the industry leaders Trump met one-on-one at his Mar-a-Lago estate in the run-up to it. McMillon was also at the White House on Monday with executives from other major US retailers to discuss tariffs with the president.
One of the industry executives aware of the details, who asked not to be named, said McMillon had brought up the issue of India’s barriers against foreign ecommerce companies at Mar-a-Lago. Walmart owns Indian online retailer Flipkart.
The US push to prise open retail in the world’s most populous country pits Bezos and McMillon against Asia’s richest man, Mukesh Ambani, whose Reliance group is India’s largest retailer and owns several ecommerce platforms.
India allows US ecommerce companies to operate only as online marketplaces for others to sell their products. Their Indian competitors can produce, own and sell goods through their platforms. Washington calls this a “non-tariff barrier”, alongside limits on foreign direct investment in retail.
“Since 2006, the US has been trying to open up India’s domestic market, and has been stymied successfully ever since,” said Arvind Singhal, chair of retail consulting firm Technopak Advisors.
In addition to Indian curbs on inventory, US retailers have faced repeated product inspections by the Bureau of Indian Standards, according to industry executives, who asked not to be identified because of the sensitivity of the trade talks.
Two industry executives told the Financial Times that the Trump administration was coordinating closely with US ecommerce platforms as part of the negotiations.
The White House, Amazon, Walmart, and Reliance did not respond to requests for comment.
“The attempt to pressure India into opening its ecommerce sector wider for American giants like Amazon and Walmart reflects a broader pattern of economic diplomacy aimed at securing market dominance for its corporations,” said Praveen Khandelwal, secretary-general of the Confederation of All India Traders and an MP with Modi’s Bharatiya Janata party.
“While foreign investment is welcome, it must not come at the cost of distorting India’s retail ecosystem or undermining the interests of its [90mn] small traders,” he added.
Trump has said India’s protectionist policies had made it the “tariff king”. The US is its largest trading partner, and the two countries have said they want to boost bilateral trade of goods and services to $500bn, more than double the current amount.
Amazon has gradually built its presence in India since it launched services in 2013, but has lagged behind Flipkart. Amazon had fewer than 40mn daily active users in India towards the end of last year, compared with Flipkart’s 50mn, according to Bank of America analysts.
